On Ep. 64 of Tokenized, Simon Taylor, GTM @ Tempo and Cuy Sheffield, Head of Crypto @ Visa, are joined by Rob Hadick, General Partner @ Dragonfly and Tyler Moebius, CEO and Co-Founder @ SmartMedia Technologies to discuss their predictions for 2026.
On Ep. 64 of Tokenized, Simon Taylor, GTM @ Tempo and Cuy Sheffield, Head of Crypto @ Visa, are joined by Rob Hadick, General Partner @ Dragonfly and Tyler Moebius, CEO and Co-Founder @ SmartMedia Technologies to discuss their predictions for 2026.
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A world leader in digital payments, Visa is bridging the gap between traditional financial institutions and innovative blockchain networks, helping players in the payments ecosystem navigate the ever-evolving world of tokenized fiat currencies with confidence and ease. Learn more at visa.com/crypto.
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Just like the internet made information global, stablecoins are making money global. And Bridge, a Stripe company, is the infrastructure powering that shift. Built for speed, scale, and simplicity, Bridge helps businesses send, store, convert, and spend stablecoins instantly, all without borders or having to navigate the complexities of crypto. Learn more at bridge.xyz
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Music by Henry McLean
Sy Taylor 00:00
Simon, welcome to tokenized. The show focused on stable coins and the institutional adoption of tokenized real world assets. My name is Simon Taylor. I'm your host for today, author at FinTech brain food and head of market dev over at tempo, and joining me for this predictions special is my co host, my friend, the man in the hour, the man with the power. Kai Sheffield, how are you, sir?
Cuy Sheffield 00:29
I'm great. This is gonna be fun. It was an amazing year. So much has happened. We gotta look back. We gotta grade ourselves, and then we gotta look forward.
Sy Taylor 00:37
Yeah, we are. We're gonna do that. But we're also joined by some perfect guests to give us some predictions for next year. First of all, making his third appearance is Rob haddock, who's GP over a dragonfly. How you doing? Rob doing? Well, thanks for having me, guys. I'm glad we could steal you away from Empire for a little moment for this one, stretching some different podcasting muscles over here,
Speaker 1 00:59
this is my favorite listen. So you guys are on my list every single week. So you know, I'm glad that I could be part of the 2026,
Sy Taylor 01:06
prediction pod. You got to set us up right for the new year, and joined by a debutante, Tyler Mabius, who's CEO and co founder of smart media technologies. How you doing?
Speaker 2 01:14
Tyler, yeah. Doing fantastic. Simon, honored to be here. Big fans of the of the podcast, and Rob and Kai, so thanks.
Sy Taylor 01:21
Let's do this all right. Before we get into the content, two quick reminders, views and opinions of contributors today are their own and might not reflect those of companies they represent. Please don't take anything we say as tax, legal or financial advice. Do your own research, and consider this for informational purposes only. And before we get into the review of Tai and myself's last year's predictions, let's just hear from our sponsors who make this show possible. This episode, if it's not obvious, is brought to you by our friends at visa, a global leader in payments. Visa's tokenized assets platform vtap uses smart contracts and cryptography to help banks bring fiat currencies on chain. Vtap allows financial institutions to issue Fiat backed tokens, improving financial efficiency and enabling programmable finance. You can check out the links in this episode's description to express your interest in vtap. This episode is sponsored by stripe. Here's a problem. So many businesses are up against money still moves like it's the 1970s on financial infrastructure that was designed before the internet was even a concept. It's slow, it's expensive, and it's tied to borders. That's all changing now. Stable coins are fundamentally a better way to move money online. They're affordable with payments that take minutes rather than days. They work across borders, and they're easy for anyone to use no matter where they are in the world. Stripe allows you to unlock those benefits for your business. One integration, and you can accept stable coin payments, pay out globally and manage your money with stable coins. No blockchain expertise required. Learn more about how you can use stable coins and expand your reach@stripe.com forward slash crypto tokenized is brought to you by our friends at centrifuge. Centrifuge exists to bring institutional grade finance products fully on chain. Centrifuge is a full lifecycle defi platform, from asset creation and structuring to defi integration, and it's cross asset by design. What that means is they work across private credit, ETFs and equities, making your financial products much more accessible and much more efficient. This is the tokenization you keep hearing about, unlocked for all asset classes by centrifuge. Thank you to our sponsors. All right, I'm going to start by giving us some grading for last year's prediction. So we did have Yuval ruse from digital asset on the show, so I'm just gonna read his out, which feels a little unfair, because he's not here to defend himself, but Yuval is everywhere at the moment, and canton's doing well. So first one is that the US moves from regulation by enforcement to regulatory clarity. That's a straight A but it was also maybe kind of obvious. This one I loved our W A's will reach 25% of stable coin market cap. And that was quite a gap back then, and it is now still it's not quite there. So maybe a c plus, because it has doubled as a percentage from three and a half percent to 7% but Yuval, that's not 25% so c plus, and then he said crypto derivatives volumes will double A plus, because this did come true. And CME, for example, recorded almost $1 trillion worth of derivatives volume in q3 2025, alone. So safe to say that was a good one. So uval is a bit of a profit. My predictions, i. Stable coins will become mainstream off the back of B to B payments, which will come to dominate in stable coins. I'm going to give myself a B here because they did, but also the stripe acquisition made that kind of obvious that it was going to be payouts and treasury management when they acquired bridge. And then I said that AI and blockchain becomes what drives the next bull cycle. That's a straight d minus because there was no bull cycle. But you know that meta is still out there, and then Kai's growing demand for stable coin linked cards. And, yeah, that's an A plus. I don't think you can move for stable coin Neo banks. At the moment, the rise of bank issued stable coins and non dollar denominated stable coins. B minus, we are seeing some banks coming along the lines. It's starting to happen, maybe a little bit slowly. And Euro C has 3x in market cap, although it's still small as a percentage. And then, of course, the intersection of crypto and AI becomes consensus B plus maybe C. Have we got product market fit x4 or two did happen, though. So you know, that became a big old narrative. Kai, any thoughts from you looking back at last year's predictions
Cuy Sheffield 06:12
overall, I'm going to be a hard grader. I'm going to give us a C, because none of these were really quantifiable. We didn't really give a number. They were all just like, directional And sure, like it was moving in the right direction generally. So we have to be better this year in putting a number out that we can then go back and measure a year from now. But other than that, directionally, we were there.
Sy Taylor 06:33
Good on you. Val for doing that. Rob your thoughts on last year's predictions from Kai and myself.
Speaker 1 06:38
Yeah, I think there were a few a little bit of low hanging fruit going on there just stable coin linked cards from the guy who works at visa right. Ai crypto was gonna do well, and obviously regulation like that was clear, but you guys did okay. Got caught up in the AI hype. I'm still, I would say, a skeptic, so maybe we can chat about that a little bit. But, you know, I think this year we'll take it to a next level. I feel really good about this.
Sy Taylor 07:01
Tai Lee, your thoughts on the narratives, though?
Speaker 2 07:04
Yeah, I'm excited to see this year's predictions and put some measurable outcomes against this so that we can look back on it.
Sy Taylor 07:12
So before we jump into Rob's first prediction, let's just do that AI thing for a second. You're a skeptic, Rob, tell me where you stand
Speaker 1 07:18
on that the AI crypto crossover obviously has a lot of different ways of which you can think about it, different verticals. For the purposes of this podcast, you guys have been doing a lot of guest appearances by people who are building on X, 402, and building on a lot of the different payment standards within stable coin linked agentic payments. I was talking about this with somebody last week. While there is so much conversation around it. There was a lot of building around it. There are still also, like 12 standards. And those 12 standards will probably be 24 standards by the time this podcast gets released. And if you think about the history of the internet until you can agree on a standard, it won't see real scaling. And this like product that actually exists. And so I'm not so much bearish around that agentic payments, especially agentic to agentic, might exist using stable coins over time, and probably will. I think agentic to human there's more of a conversation there, but I just believe it is probably much further out than a lot of people that you've been talking to. And then maybe you guys personally believe. And then I also think, you know, if we go across to the other AI crypto stuff, when it comes to inference, and it comes to a lot of the stuff we've seen around the foundational models using blockchains, we've actually started to see those people pivot away, because blockchains are latent, right? Like you don't actually want to do workloads on Ethereum or even on Solana, especially with the amount of data, the amount of compute that you need. And so I think there are places where it makes sense for that to play. I think agentic payments, over time will probably use stable coins, but I don't expect there to be that much crossover.
Cuy Sheffield 08:46
Personally, one of the traps that I acknowledge, that I fall into myself is It's intellectually fascinating, the crossover, like the intersection of AI and crypto and stable coins. And I remember this time last year, it was like, Oh, the story of goat and all these agentic X bots that were doing all sorts of things and making it was just, like, really interesting. Almost felt a bit like the NFT days. But as fast as it kind of grew, it went away, because there wasn't like, enduring fundamental value. And so, like we see these flashes, they're really exciting and interesting, but we might be 10 or 20 years away, like it might be a long way away. And so we'll talk more about I have one prediction in it that I will put a number to that maybe is, is more of a conservative number. But, you know, we'll, we'll get,
Sy Taylor 09:37
yeah, I've come all the way around on that. I'm, I'm increasingly convinced, as much respect as I have for X 402, and what those guys are building, we had them on the show that its power is a meme rather than real builders and volume. Whereas I look at the people building in agentic commerce, and I see lots happening with the visas intelligent commerce protocol and the agentic commerce protocol. Ace. P and like Walmart is live and Etsy is live and Instacart is live, and they're doing volumes on that now, and that's where the focus is. So we'll see. All right, Rob, kick us off. First prediction from you, what is going to happen in 2026
Speaker 1 10:16
Okay, I got front ran a little bit today by an announcement that Kai had this morning with lead bank and cross river. But you know, my prediction is around stable coin linked cards. Right now, Visa stable coin settlement is about three and a half billion dollars of annualized volume within stable coins for card payments. That's up from two 50 million in May. So you can kind of see how quickly that growth has come. I expect that right now, by the end of next year, Visa stable coin settlement will be over $100 billion annualized, up from three and a half billion today, and will be the fastest growing part of Visa's business on the transaction side. I think right now, Kai correct me if I'm wrong, that's the visa direct business. I think that'll be the stable coin settlement business, and I think that we will start to see visa actually pull out stable coin settlement as a another line item on their earnings by this time next year,
Sy Taylor 11:10
or I mean, that would be Christmas. Carmoly Kai, do you think it's realistic? And how much can you share, given what you see?
Cuy Sheffield 11:17
I don't think, I don't think I could comment on any of that other day, the announcement today, I think what's exciting and significant is when we launched stable coin settlement, we really started these pilots running regularly in 2023 it was all outside the United States, and it was all with non bank principal members who tended to be very crypto native. I think what we've seen over time and as regulatory clarity has happened in the US, you actually have a set of banks who are some of the most innovative, fast moving banks, and what we think of as like partner banks that play a really important role in our ecosystem, helping to enable card programs, both issuing and acquiring. They are now recognizing that moving settlement volume on chain is a more efficient way for them to manage their business and to scale these programs. And so I think being able to have not just crypto companies, but banks that are using public blockchains interacting with Visa for settlement is is a really big deal, and then being able to do it in the US, and we just see more and more demand from clients coming to us. So I can't say anything else about Ralph's predictions, other than, like, we're excited about it. And the announcement today, I think, is a good proof point.
Sy Taylor 12:27
Yeah, that announcement, I think, may have got lost on some people who forget that sometimes settlement windows behind the scenes can take three to seven days for different banks to settle up between each other, if you're in that space. And so getting to instant is like, amazing. If it goes from visa to your wallet right now, whether you're a merchant or an issuer, the more that happens, the better. Tai LA, your thoughts on that? Do you think the 100 billion annualized in a line item in earnings? Do you think it's coming?
Speaker 2 12:53
I'm gonna go with that one. Yeah, definitely. I think, looking at the overall trend that we're seeing, I think that's got some legs.
Sy Taylor 13:00
Oh, right. Well, I love you, Kai. But I'm gonna take the under on that. I'm gonna say, you know, like, Yes, I can see it hitting 3040, 50, like 10x growth from where the last one was by the end of the year, 10x is not nothing. Let's be real here. Like, not nothing. 10x is not nothing. And if that happens, that will still be all Christmases come early, but 100 is a big old brave number.
Cuy Sheffield 13:22
Those are making my job hard. Come on expectations, I will tell you, we're investors in
Speaker 1 13:28
business called rain, which has been one of the biggest drivers of this on the visa network. And when I talk to them, and I hear what the pipeline looks like, the type of people they're talking to, the type of flows they're talking about bringing onto the visa network using stable coins. I could not be more bullish about this specific category, like I think this is great for visa. It's great for rain and the other issuers. It's great for the banks. I think we'll actually see a large bank, potentially a G SIB, do a stable coin backed card next year and announce that publicly. I think the train has left the station, and this is going to move quicker than anybody realizes right now.
Sy Taylor 14:01
I love that bonus prediction there. I'm not gonna let that one slip. A G SIB will do a stable coin linked card next year. That's like a little bonus one. We're keeping that one for the highlights. That's for sure. And look, I think, given your seat, that's fascinating. And what I love about rain is there's a brand new, modern issuer processor in the landscape that happens to be building on stable coins that's a direct member of visa like you could have said that to my payments nerds folks five years ago, and they'd have been like, Oh my God, but this is also possibly the fastest growing issuer processor in history, and that in itself, sounds like it could be a case study if it keeps going for those so kudos to everybody involved. All right, I got one for you. Tier two and smaller banks start to put settlement volume through smaller, closed loop, stable coin linked settlements rails as an alternative to correspondent banking. So think Signet for banks, and they will do more than $100 billion Dollars of settlement in these little closed loops like kivalis, the European group of banks, by the end of 2026 and the reason I feel good about this is especially in the European context, there's actually no instant settlement, despite there being a separate instant because of the nature of each country having different central banks, you cannot easily settle across all of the regions. And then there's lots of tier two banks who aren't correspondent banks in their own right, who see correspondent banking as expensive and slow and having to go through their partner. So why not build something that's region wide? And then they're already talking about issuing their own consortia backed stable coin, and that reduces the overall credit risk, versus doing tokenized deposits, where you've got to figure out the credit risk of everybody here, you figure out the credit risk of the consortia that's backed by deposits at all of these banks. So I think we'll see many more of those start to emerge. There's one. It's not my most confident one. I throw a big old number out there. Maybe this will take a little bit longer, but I definitely see the opportunity, and the demand for this is really, really hot. So it's a
Cuy Sheffield 16:09
question of timing. I think cavallaz publicly, they said they're gonna go live like back half of 2026, so you might have half a year to work with on kavalis. And I think they are one of the more convincing approaches to how this would get done. So I think the question is, how quickly do they go live? How much do they scale and then I think they're like half a dozen banks that are have been announced as part of that consortium. Do you end up having many more banks that join and including tier two ones? So I think that'll be really interesting to see. And I think we'll see more of these bank consortiums pop up. It's just anytime you're setting up a consortium, the trade off is the speed, how quickly can you operate, and some of the complexity of having competitors getting together, but at some point, like, I'll take the under on the 100 billion for end of 2026 but I think that they will be live, and you'll see the first real commercial volume, going through it, and then maybe by the end 27 next time I had
Sy Taylor 17:04
to throw my neck out there, Rob, Are you a believer or a disbeliever in this sort of thing for the banks?
Speaker 1 17:09
So it's interesting, because I think you're right that they have to this is an existential moment for the tier two banks. You're coming at it and from a European standpoint. And obviously cavallis is focused on the European banks, but we've also had people in the US, like a Fiserv talk about trying to do, you know, somewhat something similar. There's a bunch of startups thinking through doing that in the US as well. I think not to call Fifth Third a tier two bank, but you know, I heard Tim Spence maybe a month ago, talk about how adopting stable coins is core to how they survive today, because of the fact that they aren't maybe in that leading seat like a G SIB, I think generally there are a lot of headwinds for banks. I know Simon You and I agree on that point. And there are 5000 banks in the US. Probably only 500 of them need to exist, right? And so the rest are figuring out. How do I digitize? And so things like this or how you survive. And so I expect we see tailwinds like you mentioned on some of these smaller banks that are more digitally native, that are trying to figure out what the future holds on doing settlement like this. But also banks are slow. And so I'll probably take the under on the 100 billion for 2026 Yeah.
Sy Taylor 18:20
My hope is somebody like the cross rivers, the leads, the smaller ones, they start to take a lead on this. And maybe it's not a consortia that does it, if you can include that too. But Tyler help me out here.
Speaker 2 18:30
Yeah, Simon, I'm sorry. I'm gonna be taking the Ender on that one. Having start my last company in Europe and spending four years there, they are not quick to adopt anything.
Sy Taylor 18:39
So a point of clarity. It was groups like kevalis, not necessarily kivalis. If I could have a mulligan on the definition there, it's that banks settling between each other. So bank to bank settlement,
Cuy Sheffield 18:53
yeah, so maybe, like, the other interesting question to measure would be like, which bank to bank settlement actually does the most volume in 2026 and like, is kavalis the most likely to what about vast bank in USBC, like, what they're doing with uphold, you could see that there could be volume moving through that. I think that's live, or, like, close to live. And so what will be is jpmd. That doesn't count, because it's just internal. Like, you got to have a bank to a bank. We got to, like, set the parameters of what qualifies here.
Speaker 1 19:23
Well, there's some argument that Connexus is already doing much more volume than this, right? Because they're doing it from like mas to the US, right? And so, you know, if you think about outside of the large G sibs, it's probably not happening today. But you could state that you probably think JP Morgan will be doing this themselves, between their partners and international banks at the exact moment.
Sy Taylor 19:44
So we had JP Morgan on the live show the same day. You interviewed guy from Athena and Bach said that in the prior 12 months they'd done more than a trillion of settlement in Connexus. So I mean, JP Morgan sneezes and it blows the entire. Able coin market out of the water. But if that ever went open loop, and they were doing it outside of their closed loop of Connexus, which now they have partnered with dBs, to potentially include other people in it, then maybe, but I don't know if I'd count that this is specifically tier two, and
Cuy Sheffield 20:16
intra bank doesn't count. It's got to be between two banks, like you got to qualify, like, between two banks, and that, I don't know what the number is. If you had to guess today, how much value has moved on chain between two banks directly in a stable coin, tokenized deposit, whatever it is, like, I don't know what that would be, but it's hard to think of a case where it's like over a billion.
Sy Taylor 20:40
Yeah, in tokenized deposits. I could see it becoming more next year, because you've got the likes of ant financial, who are now live with HSBC and Citi and JP Morgan, and they're doing 24/7 instant settlement, but they have their own bank where they're sort of managing that. You could see that sort of coming if you were to include it. But my thinking on this number is, if banks do adopt something, again, it's nothing for them to move 100 billion rightly, if that makes sense for them. In the business case, they'll maybe make it sense. But we'll come back and judge this one harshly. I suspect in about 12 months time, Rob and Kai, you actually had a very similar one as your next prediction. So Rob, do you want to you want to go first?
Speaker 1 21:21
Yeah, I'll kick it off, I think. And I'm interested what Tyler has to say about this, because I view this one from, I think, maybe a different lens than Kai does, but similar theme, which is that I expect a major corporate will announce that they're changing their loyalty program, which exists on balance sheet and traditional loyalty points today, and they'll collapse that into maybe some sort of stable coin powered, or tokenized asset powered program this year, right? Not just a POC and call it a new thing that exists to the side, but collapsing an existing program. And I think specifically it'll be around using stable coins to provide cash back, because I think cash is king, and that's what all of the retail consumers want today, but I think maybe Kai and Tyler would view it as broader than that, but that's what I think the driving force behind this will be.
Cuy Sheffield 22:09
Yeah, I want Tyler to explain my starting point on this is that I think tokenized loyalty points are actually a really interesting model and structure that could potentially solve a lot of problems and be a much better product than how loyalty points are designed today. And we've gotten a bunch of merchants that have come to us and asked, like, should we create our own stable coin? And my initial reaction most cases is probably not like, just like, what does that actually solve? And I think it could make more sense for merchants to tokenize loyalty programs than it could for merchants to try and create a brand new, separate stable coin product and and I think that some of the value props, which Tyler could talk more about, is if you wanted to partner and have your loyalty program accepted by a complimentary brand. Well, if your loyalty program runs on chain, and it could be accepted with anyone who could accept an ERC 20, that's much easier than if they're in proprietary databases. And then I think that the structure of being able to back in design loyalty programs with similarities to stable coins, with the opportunity to earn yield and economics with it being off balance sheet, like they're these really interesting properties. So I credit Tyler, as we've been doing a bunch of work with smart media, he's continuing to pull me down the rabbit hole and maybe talk through Tyler, like, why you have so much conviction on the space. And then I want to get, like, a number that we can measure on the prediction when we come back next year. And so we got to figure that out next yeah, there's
Speaker 2 23:31
a lot of dynamics that are taking place. So one, there's kind of a recent announcement between MasterCard and Visa around the settlement on interchange and giving 50 basis points back, right? And so rewards programs are under pressure in that as interchange fees continue to come down, it's going to be difficult to be able to give that 1% cash back on every swipe. So we're going to need new ways of funding rewards programs. There's no better way to do that than to be able to generate yield off of the reserves. Just to kind of frame this, it's estimated that there's nearly a trillion dollars of unused point liability trapped on corporate balance sheets. When you look at the reserves that are backing that that would make loyalty points as a currency the third largest currency in the world behind the dollar and the euro, right? So it's a massive opportunity to be able to tokenize that and start to generate yield. And the latest earnings call from United, they just paid off their $5 billion revolving line of credit that was actually securitized against their $8 billion in point liability. So we're going to continue to see large corporates and your biggest programs actually tokenize that liability to make it a yield bearing asset. So that's one two users want to be able to utilize their points, right? And so we're going to see the ability for points to become a new funding source. Tied to your credentials. So I can tap to pay with my debit card, I could tap to pay with my crypto, and then I can tap to pay with my points and actually settle. And swap those points into a stable coin and off ramp into Fiat to be able to actually settle. So you're going to get a tremendous amount of utility around that. And now that you have a interoperable, programmable point, and that point can start to act and look like a currency. We're going to move from points just being a marketing expense to it now being a new revenue stream that every merchant can actually sell to their sponsors or to their direct consumers. So what does that mean? That means I can now go to like Starbucks is the analog. You get more rewards if you pre purchase the Starbucks points using PayPal, using your debit card or ACH, rather than using your credit card. So effectively, every loyalty token will become a branded stable coin that will enable those merchants to launch their own closed loop payment network, so I can purchase those miles directly and use that branded stable coin to actually make the purchase, and then I as the consumer will reap the benefits in terms of the cost savings that the merchant was able to reap.
Sy Taylor 26:21
Do you know it's interesting, we spoke on the last show, Kai about needing to come closer to the definition of what is a stable coin, because there are so many things that get called a stable coin, from usde, which is more collateral, like in its behavior, to algorithmic things, to genius compliant, to tokenized loyalty that you can denominate in dollars and tokenized loyalty that has a yield bearing capacity for the merchant. Just sounds like a no brainer. If you've got all these liabilities sitting there, do you want yield on them? Yes or no, yes, I do. Okay, here's the technology that enables you to do that. And then do you want to be able to unlock new capabilities for those that kind of tracks? I do want to come back to Rob's point, though, and try and stir up this debate a little bit on the cash back side, because if interchange is coming down, where's the money for cash back and you also had something in your written answer, which was gift cards. Now that one struck me as interesting. And you also said cash is king. When I think about stable coins, I think about stable coins are like better cash. They're instantly 24/7, they're global cash that I can stick in a teleporter, and they can show up at the other side of the world. They're amazing things. And gift cards are like, super high fraud, super high breakage. They're not very consumer friendly. Why wouldn't those be stable coins like that? Then gives me some new optionality there. So do you stand by your cash back thing? You're still with it, even with what Tyler shared about the pressure on interchange?
Speaker 1 27:46
Yeah, so I do. I understand what Tyler's saying, and we're obviously seeing a lot of tailwinds behind taking on balance sheet liabilities and taking them off balance sheet, right, and trying to figure out ways to do that, and tokenization is a good way to do that. I actually think a good corollary here is to think a little bit about Klarna and what they announced with Klarna USD. And one of the things that they talked about, or they didn't actually talk about, was loyalty, right? But they did talk about, hey, well, they're gonna have a consumer wallet, and my guess is they will have a merchant wallet, and they will have Klarna USD, of which, you know, obviously I believe that's being issued by bridge, where I expect that they will have most of whatever the interest rate on that is, right, of three and a half 4% that allows them to incentivize people to stay in that wallet, right? That alone is essentially a cash back program, right? They can decide how much of that to share with that end merchant or that end consumer, but it is basically a cash by program for or its interest for, or rewards under the current definition of genius, for having somebody sit in that wallet. Right interchange is coming down, but there is likely to be, especially if you talk about stable coin backed cards, some of these call it non bank issuers, like a rain that we talked about earlier. There's likely to be more share of interchange with whoever the wallet holder is or wallet provider is. So somebody like a Klarna could theoretically have more of the interchange than they have today, which is usually zero, because Klarna itself, by the way, the way they make money today is actually merchant rebates, or the merchants pay them, right. So now they're getting some share of the interchange right? Theoretically, if they have a stable coin backed card, and they have the interest from the stable coin itself within the wallet, and they can probably say, Okay, well, this is three and a half percent plus we're getting some share of call it the 2% interchange. And if you keep x amount of balance in your account, we can give you 5% back. And I expect there to be a lot more programs that look like that, and maybe we're using the term loyalty a little bit interchangeably in ways that Tyler doesn't mean it to work, but I think that'll be the way of which people try to increase their mouse trap and hold people into their programs. And that will essentially be a new form of loyalty. Citi put out a report, or maybe. JP Morgan put her out of report that 63% of consumers today say they prefer cash back to any other type of loyalty on their credit cards, and only about 58% of cash back is the amount of rewards that go back to people. And that 63% has been growing year over year, and I think more and more and more, there's an expectation that the other types of loyalty assets are devaluing, and cash is king, and so that 63% will come up, and the ability to do these types of programs with stable coins and maybe sharing interchange will be the de facto way of which these more consumer friendly companies start to engage with their consumers.
Cuy Sheffield 30:37
There's so many interesting questions to unpack here. It's like, where's the line between a tokenized loyalty point and a stable coin? What does that mean around what the reserve assets are, who the issuer? Is it under the genius act or not? Is this a new way to create co brand cards that has a lower buried entry, that any merchant can create a co branded stable coin? Is this a private label kind of close so you could take all of these payment products that have existed for decades, and go one by one gift cards and say, How would you build that from the ground up, using some type of a tokenized loyalty or stable coin construct? I don't know what the right answer is, and which of these is going to take off like, for the sake of trying to measure ourselves next year, one interesting question would be like today, if you say, what is the market cap of a tokenized version of a loyalty point where there's some underlying reserve that's sitting in a bank or in a custodian backing a token that's issued connected to loyalty like Tyler. I don't know if you have a sense of what that is today, but I don't think it's very high. So my prediction was going to be, we get to a billion and be like a new stable coin goes live and grows from zero to a billion, which we've seen in a year multiple times. We've seen that from usdg, we've seen that from RL, USD. So it could be a single merchant that launches and their loyalty program grows and they have a billion dollars of value back yet, or collectively, I'll hedge with, like, all loyalty programs issued in this way, there's a billion dollars, and so they make up what would be like the sixth, seventh largest stable coin. But Tyler, does that? Joel, do you have a different prediction on the number? And like, if you had to guess what's the value today, it seems like it's so early that there's not a meaningful amount that exists
Speaker 2 32:23
in circulation? Yeah, I would, from what we know currently, there isn't any meaningful tokenized reserves that are pegged to the loyalty value. There is $300 billion worth of point liability issued every single year. So Kai, I was coming in on that same you know, I think this is the year we'll see a billion dollars of tokenized collateral that's generating yield that is pegged specifically against loyalty points. And that's sort of in line when you look at total stable coin market cap, and then even, like real world assets, right? So we're at about that 5% of tokenized loyalty liability will make up five to 10% of the real world assets that are tokenized in 2026
Sy Taylor 33:09
nice, nice metrics. Tyler, thank you for bringing the data. I appreciate that. Look, I'm going to move us to my next prediction, which is regulation related. So couple of like binary ones. I think the clarity act will pass. I think the UK will pass fully its stable coin regime. And we saw in parliament the draft bill is now complete. So they'd take about another 12 months ish to go, so that one will be pretty tight. But then I believe that the reason JP Morgan launched the m o n, y, the money fund is because they believe clarity is going to pass, and that that's going to give them a lot more air cover to get into non tokenized deposit like assets, and as a result, money becomes bigger than Biddle. That's my sort of measurable prediction. Biddle, as we know, is the largest branded kind of money market fund that's tokenized. BlackRock has done an amazing job getting close to the stable coin issuers and being the money market fund of choice, but it's only available to like five or six customers. JP Morgan's going to go out to everybody else and they're going to place a win, because that's what the Borg does. They will assimilate you and they are the largest in the universe and never get a bet against. JP Morgan, rob your thoughts on this one, your thoughts on the regulations more broadly, and if somebody like a JP Morgan can play in the tokenized money market fund space.
Speaker 1 34:29
Yeah, I've been, I think, probably more bearish than the average person on clarity, or some sort of reconciled version of clarity passing. It still feels like from the conversations we're having in DC to be a bit of a coin flip. It really depends on who you talk to and the time that you talk to them. I absolutely hope it passes that said, I don't know if it actually matters that much for the next couple of years, right? So I believe that what is going to happen if we don't pass clarity is that. Will just see rule making that gives us some level of comfort anyways, from the SEC and from the CFTC in the near term, the real concern is not what happens during this administration, but it's if you only have rule making is there, you know, call it a snapback and potential change in the way that the regulators think about it, post a 2028 election, right? So I think regardless of clarity or some reconciled version of that, I think in the US anyways. JP, Morgan is going to continue doing these types of products. We're going to continue innovation, but there'll just be more concern about what happens post 2028 but I think my perspective is from the people I talk to is that the train has just left the station, and there is just no way to put the genie back in the bottle to torture a bunch of analogies, and we'll just be far enough along. And so that's why people are doing this. So I don't know, I think it's a coin flip on clarity, but I hope, I hope you're right, and I don't have a good view into what's happening in the UK, so I would just just cede that to you. I actually don't think that Mo and wild will get bigger than Biddle, though, right? Because I do agree that you're right that JP Morgan will start distributing it to everybody, but the second that Blackrock sees that happening, they'll just do the same thing, right? And they are a more credibly neutral player relative to the other banks, to the other, you know, wire houses, the other people who would use a potential money market fund, and so I expect there to just be kind of increased competition, but that Blackrock will do a good job meeting JP Morgan where they are.
Cuy Sheffield 36:29
I'm interested in what happens with Biddle over the next year. I'm looking at the chart now, and Biddle grew very quickly. Got up to close to 3 billion in supply, and then over the past month or so, it's now dropped quite a bit down to like 1.8 billion. There's still only 100 holders. Shout out to RWA dot x. RWA dot XYZ, great data source for this. There are only 100 holders, technically, in terms of number of addresses now that could represent larger entities. But how much do they push this? And there's a high minimum, I think you have to have 5 million to buy. Million to buy it. The initial focus seemed very crypto native. A lot of the holders were stable coin issuers that were using it to back a stable coin, or like a Dao or crypto native Treasury that was holding it. And so it doesn't seem like Biddle has gotten meaningful traction with institutions that are non crypto native. It's been like a crypto product. And even the name Biddle is it's a crypto meme. And so it was amazing that Blackrock did that. But like, it seems like a crypto product, and so I'm interested to see the positioning of as jpm launches this I would be surprised if they position it just as a crypto product. It's probably going to be more mainstream, institutional investor focus, but then a lot of it comes out. Okay, well, what can you do with it? Can you put it in a protocol and be able to borrow against it, like, if it's just equivalent of you're buying and holding it the same way you buy and hold an off chain money market fund doesn't solve a huge problem, but I'm excited to see the just those charts, the comparison of Where's Biddle? End of 2026 Where is money? Where are those two? The end of 2026 I would bet Biddle is still ahead. But I think it could go either way. So I think that'll be good to good to watch
Speaker 1 38:12
money, by the way, great ticker. So, like, maybe they should just win on the ticker alone.
Sy Taylor 38:16
They should definitely win on the ticket, M, o, n, y is, yes, it's phenomenal. Ticker, here's my thinking. JP Morgan moved trillion dollars through Connexus, and that was before stable coins became a thing, and before Connexus became the central strategic pillar of their entire payments business, the biggest payments business in the world. And so if this is the central pillar of your biggest payments business and corporate treasurers are your customers. What do corporate treasurers do? They build the water flow. They have their overnight cash, their money market funds, and then into your sort of tier two assets. That's the waterfall you build. If I can do Instant 24/7 tokenized deposits through Connexus, why wouldn't I want an instant 24/7 swap for a money market fund that I think does solve a real problem for people. So little bit of a cheat code there, which is like, I've already got a bunch of customers. I could just distribute this to people who are already doing it, but they weren't necessarily distributing those money market funds before. So they get into a new business line for those corporate treasurers. So that was kind of my thinking on this one, Rob, you had another interesting one as your next one. You want to
Speaker 1 39:23
read this guy out? Yeah. So we saw a, I think what it actually kind of went under the radar announcement around iba KR taking stable coin deposits powered by zero hash. I think it was either earlier this week or last week, PayPal mentioned, or they announced back in July, sort of a pay with crypto widget that they were going to be launching. And some of these announcements haven't gotten a lot of airplay, because there's a lot of, I think, general disbelief that there should be merchant payments, or there should be, you know, e commerce payments in stable coins. I think even for people who are stable coin believers, because there's so much conversation around B to B and. In correspondent banking, et cetera. But my belief is that if you use Klarna USD as this canary in a coal mine of more and more of these fintechs wanting to push the marketplace that they have of merchants and users on stable coin and tokenized rails, more and more and more people will just see this as a cash equivalent, and will want to be able to use this wallet. And so I think what we will see but by the end of next year, is that there will be a call it a pay with stable coin, or pay with crypto widget on almost every major e commerce marketplace and website by the end of next year. And that volumes there will actual merchant usage will increase to, I actually hadn't thought about this number before, so I'm pulling this out of thin air right now, but I think we'll see over $2 billion of annualized usage for merchant pay with crypto, you know, acceptance or payments by the end of next year. I was
Cuy Sheffield 41:00
getting ready to come in with, like, a big objection, and then you said $2 billion I was like, okay, like, $2 billion the bigger point, though, like, talk about the bigger point. Yeah. So first, like, we go to the data. One of the most interesting case studies to look at is, how is Shopify doing with their direct acceptance of USDC on base Shopify, one of the most innovative, fastest growing e commerce marketplaces covers like all different types of E commerce retailers worked with Coinbase and base to design a specialized protocol to solve for refunds returns. Like all these innovative features, recurring subscriptions to accept USDC. Great PR moment, Shopify now accepts USDC. On one hand, I think what a lot of people don't realize is, by doing that, I now have a public dashboard where I monitor it. Have bookmarked what Shopify is, USDC volume is which a lot of merchants are not usually familiar and comfortable with, that level of transparency of their volume. But does anyone have any guesses of how much in total volume Shopify has accepted in USDC since they launched in June, May, 100
Sy Taylor 42:10
grand. I'm gonna say 1,000,600k
Cuy Sheffield 42:14
so more than Rob, but less than Simon. And so I think that's where, like you just look at what the scale is, and it is very, very low. So I have no doubt that, like, you will only see more merchants add a pay with stable coins acceptance button. Like, there's no reason for merchant not to and like, there'll be providers that do it. I think the question is, for a traditional e commerce merchant, how many consumers choose that option and go in and, like, change behavior to how they normally pay. And I think that that's what we've yet to see. And Shopify, I think is also giving 1% back. And so it's not even like there's no incentive. It's like they're actively, like, doing things trying to drive adoption of it. We have not seen demand for consumers to switch how they pay right now in E commerce and pay with the stable coin. And so I think you'll see a lot of experiments in different approaches to try and do that. I think depending upon the merchant category, it matters a lot. I think large value, high end purchases. We see real estate, we see car dealerships. There are plenty of these categories where direct stable coin payments make a lot of sense, and they're replacing what might have been a wire like a bank transfer, that didn't work very well. But to me, like the long term metric that I really care about is how much volume happens in stable coin link cards, and how is that growing, which is actually volume that's coming over our network, versus how much volume is happening in a stable coin directly at a merchant, which is over a blockchain. And I think today, we're seeing more demand and faster growth and more activity in stable coin linked cards than we've seen in direct stable coin acceptance. And a lot of the data is public, so you don't you can just look at it, and we don't see that changing anytime soon, but it'll be really interesting to watch both what new acceptance happens, and then, more importantly, does anyone want to use it?
Speaker 1 44:03
My perspective here is that you're completely right, because right now, people don't want to take their primary source of money, which is in a bank. It's digital, but it's not tokenized. It's not a stable coin. Maybe it's a card and go and then swap that to USDC, and then pay that to Shopify, right? The long poll here is, are they actually holding stable coins, and are the merchants actually holding stable coins, right? And so you need somebody to distribute wallets, stable coins acceptance, so that it looks like digital money, right? If you look at the data right now on an E commerce, something like 66% of E commerce volume today is in some sort of digital payment format. Right account to account is the fastest growing part of payments in e Commerce today. It's, you know, a much lower denominator. So you start to think about this type of digital payment that people are getting comfortable with, and stable coins if they're already. Be holding them are likely to grow really quickly in my my mind. And so this is why I use Klarna, again, as an idea around this. Because if you give people, and you incentivize people, you give them wallets, and you incentivize them to hold the stable coins, and then it looks like cash is accepted, like cash, then they will use the stable coins at the merchant, right? And so that's, I think, the infrastructure level and the incentive level is what you have to solve for you and I are both very bullish on the cards, right? But I think that this will be also extremely fast growing as people get more comfortable with that type of digital wallet.
Sy Taylor 45:32
We have three more predictions to get through, so I'm just gonna wrap this one with I actually thought, what's interesting about the theme so far from this episode is you hear a lot of people say there are no domestic use cases for stable coins. And here we've talked about loyalty. We talked about instant settlement. And really where I thought you were going with this Rob was actually cash wallets holding digital money, and there being some incentive to the merchant or the brokerage to just hold that as a stable coin, and if a consumer just loads that with Visa direct or ACH or whatever, but it's held as a stable coin, and they don't see that happening. That's where I actually thought you were going to go, because those wallet balances just make a ton of sense, if I might broker and then can do other stuff with it. But Kai, in the interest of time, your next one, sir, yeah.
Cuy Sheffield 46:16
So we've been talking a lot about on chain credit in the opportunity there on the show. And so my prediction is that the collateral for on chain stable coin denominated loans, that is a tokenized, real, old asset, or non dollar stable coin, is going to grow 5x in 2026 so what does that mean in 2025 we saw on chain lending, loans issued denominated in a stable coin through a smart contract, grow about 175% and there's about two $50 billion in stable coin to dominate loans originated on chain, which a lot of people still don't realize. Whoa, that's a lot. However, if you break down what those loans look like, they're all collateralized. 75% of the collateral they're crypto assets. So it's people borrowing against their Bitcoin or eth. Only 1.8% about 1.5 billion, are tokenized rule of assets. And so this is exactly what we talked about. Like, what's the point of a tokenized rule of asset? Well, you can use it as collateral to be able to borrow against through a smart contract. That is a net new feature. And so I could see as more tokenized assets come on chain, as more non dollar stable coins emerge, that's going to grow significantly. And so I could see $10 billion of real assets or non dollar stable coins, being used as collateral to borrow on chain. And one of the use cases, I think, is the most interesting, is I've now talked to, like at least a handful of companies that are trying to solve the on chain effects problem through new types of on chain lending, where you can lock up a local currency, stable coin or local tokenized Treasury, and borrow dollars, pay your supplier in dollars if you're a stable coin, and then when you get paid back, you repay The loan. And so they're basically saying that to do an FX swap from a local currency South African ran to USDC. It's much more expensive than to just take a tokenized South African ran use it as collateral, borrow USDC, pay your supplier, wait to get paid dollars again, and then repay the loan. And so I think you're gonna see these really interesting new use cases that are on chain lending that have nothing to do with Bitcoin or eth as the collateral that are going to grow significantly in 2026
Sy Taylor 48:30
Ooh, that's a whole show that is a really interesting, like FX conversation, because everybody's like, where are they? Non US dollar stables. And it's like, do we even need them for anything other than collateral for moving dollar stables around. Tyler, any thoughts on this one?
Speaker 2 48:45
Yeah, as we're looking at how we're holding collateral, there's J triple A J treasury. I'm seeing a lot more of the tokenized assets that are coming on that just have higher yield, that are giving us access to be able to fund those reward programs. So I think that that's going to be a pretty big opportunity. So I'm going to go with the over on Kai's prediction on that one. Ooh.
Speaker 1 49:09
Rob your thoughts. I totally agree. I think this is a big theme for next year, and I would probably take the over as well. So I think this was a great prediction. I'm going to say that
Sy Taylor 49:19
as a bonus prediction, we'll see at least two, possibly three Neo banks get into some sort of collateralized or on chain lending, each doing more than a billion of real world assets themselves as an alternative to getting into balance sheet lending, because I think that's a fascinating business model, but another one for me here, which is the DTCC will go live with all US stock entitlements on chain. And what happens next could be fascinating. My boldest bet is that Robin Hood announces a plan to go token native, following this shift and gradually remove all of their infrastructure from traditional clearing and settlement towards using token native clearing and settlement. So it's. On a numerical measure, DCCC will go live, which they've stated their intent to do. But the second thing is, I believe Robin Hood's gonna go token native and try and move their infrastructure away from that. Any thoughts on like stocks Rob and the entitlements around that? I know Robin Hood did the thing with arbitrum, but the DCCC move, I think people are sleeping on this one. They're not paying enough attention to it.
Speaker 1 50:22
I 100% agree. The DTCC has been working on tokenized settlement and clearing for equities for actually, a while, right? I do think that, you know, maybe you're a little early for this specific prediction, because story in my life, man, well, listen like you meet a great venture investor. So, but the conversation I'm hearing a little bit more is actually more on private equity than public equity for the near term, and that's because there is actually no central clearing for private equity. And so everybody always talks about, okay, well, tokenized private equity is going to be huge, right? Because you can more easily divvy up and fractionalize these shares, and you can move it more easily, use it as collateral, et cetera. But I think a lot of people would tell you that big part of the reason that hasn't grown is because these exist in silos at these counterparties that people don't necessarily want to trade with, and that they'd rather have some sort of centralized clearing system. And so if the DTCC offered tokenized private equity, and people got more on board with that and consortium model, that maybe you'd see that grow really quickly, and I think that might happen at a faster rate than the public equity side that said, I totally agree that that's where the market's going. There's a lot of push for this. I'm going to disagree with your Robin Hood point. And the only reason I'm going to disagree with that is because Citadel and Robinhood are in bed together so deeply, and Citadel has been so publicly anti clarity, and they're very publicly Anti A lot of the tokenization efforts that actually their competitors have been supportive of. And so I'm interested to see how that relationship evolves.
Sy Taylor 51:55
Ooh, yeah, Citadel secretly runs the world. Kai, any takes on this? I don't have a strong perspective on Well, yours is the next and last prediction for the show your last 2026 prediction?
Cuy Sheffield 52:07
Yeah, we covered this a bit in the discussion the beginning. I'm still fascinated by x4 two, so I'm going to throw x4 two prediction in here, just because I think it's really fun and interesting to watch. So from what I've seen, I think there's been about $36 million of volume that's gone through x 402, to date. While it's hard to estimate, the sense we get is at least 90% probably more of that is tied to meme coins, where people are just minting a meme coin through x4 two. And so it's not really agentic, and it's not even really selling a good or service. It's just another way to mint a meme coin. So I would say, in the most optimistic sense, maybe there has been $2 million of non meme coin activity in the most optimistic and and I'd say, after meme coins, the second use case has been crypto data services. There are a number of servers that sell crypto data, and I think that actually makes sense. Where you have developers that are building all types of experimental on chain trading products, how successful they are like, who knows, but you have like, an ecosystem that wants to create an agent that can autonomously either trade or find the best yield in a protocol. And so we're seeing a bunch of those companies pop up. And so I could see a world where those developers want to be able to buy data that they use to then make these decisions. So there's a little bit of that happening. My prediction is that in 2026 there will be some major, big tech, SaaS provider that will actually sell a product on an X 402 server. And I would say that there could be at least 5x growth. So maybe we have $10 million of real volume going through x 402 and I think that server is likely to be a server is just a merchant in the x 402 language, something that's very developer facing. And so a developer tool that someone needs and and I think the use case is, if I'm vibe coding in cursor and I want to buy some service that I need to finish my project, instead of having to leave cursor, go create an account, go grab an API key, put a payment method on file. Wouldn't it be great if inside cursor, I could then have a wallet that I could then pay for some developer tool that I need without leaving the environment. So I think there's this really interesting early B to B, developer facing economy. I don't think 2026, is going to like hit Escape Velocity. I think we're still years away, but I think we'll see it, the first examples of it going from meme coins or crypto data to some actual useful service that someone is buying, even if it's at a small scale. So that's the prediction. And Rob might say, 10 years too early, like, and there'll be 100 other standards, like, in terms of where this goes?
Speaker 1 54:59
Well. Well, Kai did say maybe on some small scale. And so there's a little bit of hedging going on there. So I'll give him that. But listen, I mean, the fact that Cloudflare talked about doing this on X 402 is obviously a bit of a feather in Kai's cap. And so we'll see what happens there with Cloudflare. I do think it's far too early to pick x 402 versus something else right atxp Or, you know, and depending on, like, what happens with ACP and AP two, and like these other parts of the stack, and then how people kind of change the way or they work with, et cetera. But yeah, maybe on a small scale, the one thing I will definitely give AI generally, is that it continues to move at a quicker pace than anybody could ever have imagined three years ago, and there is a lot of money being thrown at agentic payments. And so this is one where maybe just my past belief of how quickly things move needs to be recalibrated, but probably too early.
Sy Taylor 55:54
The wild card, as you say, is Cloudflare. If Cloudflare turns this on, let's see, because was it Disney or Warner Brothers or somebody did a Disney did a deal with open AI to use their characters in the Sora, the video generation model we've seen New York Times, Wall Street Journal, others have done some of these bilateral deals. And you've got to think, Okay, those are the people that were going to give you a big lawsuit that would give you a headache. But what about every other bit of IP and every other bit of content, like there's a maybe there and Cloudflare could fit into the middle of it. But how high up their agenda for 2026 is that? Especially given they've had some outages and some cyber issues recently, I'm sure they're much more concerned with that stuff. Well, what a place to leave it. We went full circle on them. Maybe we were too early with agentic and Kai respect for coming back around and trying to put some metrics to it. And that's our 2026 predictions for this show. Thank you so much for listening or watching wherever you are. I'm gonna do that annoying host thing and ask you to like and subscribe and spam your friends to watch this show too, because it actually helps people find it. If you want to get nerdy and get weird in 2026 you know where to find the tokenized podcast. And if people want people want to find Tyler and everything you guys are doing, what are they good to do there?
Unknown Speaker 57:06
Yeah, best place is LinkedIn. Thank you. Thank you
Sy Taylor 57:09
so much. Tyler and Rob. How about you and dragonfly?
Speaker 1 57:12
Yeah, at haddock M my middle initial on Twitter or LinkedIn,
Sy Taylor 57:17
Kai. How about you
Cuy Sheffield 57:18
on X Kai Sheffield and visa comm slash crypto. You'll
Sy Taylor 57:21
find me at sy Taylor or over at tempo. Dot XYZ, and you'll find me at FinTech, brain food.com screaming into the void. Thank you so much for watching. We'll catch you next time.